May net falls 46%; markdowns weigh

DanBurrows

NEW YORK (MarketWatch) -- May Department Stores Inc.
MAY, +0.00%
said Tuesday first-quarter net income fell 46% to $41 million, or 13 cents a share, from $81 million, or 24 cents a share, in the year-ago period. Excluding items in both years, earnings would have been 15 cents a share versus 26 cents a share in last year's first quarter. On that basis, earnings fell short of analysts' average estimate by 1 cent, according to Thomson First Call. Sales for the period rose 14% to $3.4 million from $3 million a year earlier. However, weak sales among the St. Louis retailer's proprietary ladies' and men's apparel brands forced the company to take markdowns, which reduced gross margin and erased about 4 cents a share from earnings. Additionally, May took charges of about 1 cent a share for merger-related expenses. The company is expected to close its merger with rival Federated Department Stores Inc.
fd
in the third quarter. Shares in May closed up 28 cents at $37.20 Monday.

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